A real estate broker is a type of agent. An agent represents the interests of another person, who is called the principal. A real estate agent is someone who, on behalf of his or her principal, negotiates for the purchase, sale, leasing or financing of real property. Agents work for pay; they expect to be compensated.
As a rule, a broker will be hired either by a prospective seller or a prospective buyer of real estate. A seller’s broker will often handle all aspects of the sale. Brokers are not legally required to do any of these things, but as a matter of business custom it is now expected that a diligent and knowledgeable seller’s broker will do the following. In consultation with the seller, the broker will set the price at which the property will be listed. The broker will arrange to have the property listed on the local Multiple Listing Service. The broker will arrange for open houses and other ways to show the property. When prospective buyers show interest in the property, the broker should arrange to have offers and counter-offers properly made in writing. The broker will arrange to have escrow opened. A good and diligent agent will follow up on virtually every aspect of the transaction, until it closes.
A buyer’s broker represents the interest of the buyer.
He or she will advise the buyer whether the price is fair. He or she will advise the buyer about the different covenants and contingencies in the contract. While a broker can not give legal advise, he or she is a professional, who should have a broad knowledge of real estate transactions, which can assist the buyer in all aspects of the transaction.